Who was belle of the ball for the markets in 2017? It was of course none other than Bitcoin.
In fact, according to google trends, Bitcoin was the fourth most searched on the “what is?’ query in the UK and 2nd on search in global news in the US above the likes of the Las Vegas shooting and the solar eclipse in 2017.
Of course Bitcoin trading was also a hugely searched term globally as many people were excited about the potential of trading this volatile cryptocurrency.
So yes, 2017 was a massive year for the Bitcoin. But as 2018 begins there are signs that another cryptocurrency is about to jump into its shoes?
January has seen the rise of a potential future contender for the title of the “king of the cryptos” called Ripple. At the end of December, Ripple(XRP) was trading around $0.25.
But as 2018 began it skyrocketed to hit an all-time high of $3.84. Of course being a cryptocurrency it goes hand in hand with volatility and at the time of writing it has since dropped by 55% and is trading around $1.72.
Even so the vast moves it has made so far this year has caught the attention of the markets, with some touting it to be the next big thing.
But what is Ripple and what makes it different to Bitcoin?
Ripple is actually a decentralized transaction network which also issues a digital currency also called Ripple or commonly referred to as XRP. It was launched in 2012 and like its older bigger brother, XRP is also decentralized currency.
However, Ripple is controlled by just one firm and has got some connections to some major banks like Bank of America, HSBC and UBS.
Also due to the fact that Ripple doesn’t use a mining process like Bitcoin does, it can be a lot faster to transact, it’s cheaper and is also more energy efficient.
Another massive advantage Ripple has over Bitcoin is that as it is can act as a decentralized exchange where anyone can purchase or sell XRP within the network, whereas Bitcoin requires a third party exchange to make transactions.
Will Ripple take Bitcoin’s throne?
Of course there are always two sides to the argument on whether 2018 will be the year of Ripple. Firstly, the fact that it is faster and more efficient is a major plus point for XRP, but the fact that Ripple is focused on cooperating with banks and other financial institutions to help improve how money is transferred globally could lead the way for it to become the first really legitimate crypto currency which is accepted by everyone.
Bitcoin has always been criticized for not working financial institutions and many believe eventually the banks and governments will come down on hard on it for this very reason.
However, other analysts believe there is no stopping Bitcoin now that the wheels are in motion and that it will remain at the top and possibly even reach $50,000 by the end of 2018.
There is also another argument in Bitcoins favor.
The supply of Bitcoin will be limited to 21 billion coins, with 16.7 billion currently in circulation. Ripple has initially created 100 billion XRPs, with 38 billion currently in circulation. So the question is supply and demand. If there is over supply of Ripple how can it maintain its value?
Either way, it looks like we do have a potential fight on our hands for the title of “king of the cryptos”